There is money to be saved by renegotiating your mortgage, so don't let the grass grow under your feet.

My home loan rate is 4.98 per cent and I understand this could be lower. My loan balance is around $600,000. How do I negotiate a home loan reduction with my bank?

Olivia says:

Paying too much on your mortgage is not uncommon but with a few small steps, you could be saving thousands of dollars each year.

With the size of your loan you could be saving up to an extra $5000 per year with interest rates now hitting in the high 3s but you need to be willing to negotiate or walk depending on how much you want the savings.

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Here are a few tips to get you started.

Do your homework

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Look around to see what is on offer at other lending institutions. There are many comparison websites such as Canstar, Ratecity or InfoChoice which will give you some idea as to what is on offer in the home loan market. Work out how much you would save by using their home loan repayment calculators.

Contact your existing bank

There is no need to change loans if your existing bank comes to the party. Call them and tell them that you are looking around for a better deal and tell them what you have researched and how this compares to your existing home loan. In most cases they will reduce your rate just by asking.

Be prepared to walk

Even if a bank is willing to reduce your interest rate this still might not be as competitive as others in the market. Be prepared to walk if the savings are modest and if you know from your research that there is more savings to be had. The process of changing banks has become more streamlined these days so whilst a little inconvenient to change, the savings should more than compensate the time involved in switching.

Use a broker if you don't have the time

If you are time poor, why not seek the services of a mortgage broker. They will take the hard work out of comparing loan products for you and recommend something that is suited to your personal circumstances. Whether you need an offset account or redraw facility, they can do the running around for you.

Be careful

Changing lending institutions doesn't come without its traps. Always check the comparison rate and not the headline interest rate that banks advertise to be able to see what your interest rate equates to including all costs. Check for any fees that may be payable if you do change loans and ask about valuation changes as this may influence how much you can refinance.

Review yearly

Having a home loan is not a set and forget strategy. Each year you should be repeating this exercise to ensure you aren't giving away unnecessary money. With a little bit of push and a little bit of time, you could be saving thousands so what are you waiting for?

Olivia Maragna is the co-founder of Aspire Retire Financial Services and is a respected and independent financial expert. Olivia's advice is general in nature and readers should seek their own professional advice before making any financial decisions.